Edited version of private advice

Authorisation Number: 1052304282917

Date of advice: 11 September 2024

Ruling

Subject: GST and other health services

Question

Are you liable to pay GST on the supply of your CPR and first aid classes?

Answer

Yes.

This ruling applies for the following period

11 September 2024 to 10 September 2028

Relevant facts and circumstances

You are company that is registered for GST.

You provide classes (referred to as classes throughout) that teach cardiopulmonary resuscitation (CPR) and first aid to parents and families with babies and children up to primary school age.

Your classes do not teach anything about the birthing parent's health (i.e., prenatal classes on labour and birthing).

You are not registered (or otherwise approved) by a State or Territory authority that has responsibility for registering (or otherwise approving) entities that provide first aid courses. Nor are you approved to provide first aid courses by a State or Territory body that has responsibility for approving the provision of such courses.

The classes are taught by your employees who are all registered nurses (RN) with current Australian Health Practitioner Regulation Agency (AHPRA) registration.

You are engaged by hospitals to teach group classes to their patients and families. The agreements require you to either charge the hospital for your services or invoice the individuals directly.

You are engaged by other organisations to teach group classes to their clients and families. You invoice the organisations.

You provide private and public classes to community members.

Relevant legislative provisions

A New Tax System (Goods and Service Tax) Act 1999 section 9-5

A New Tax System (Goods and Service Tax) Act 1999 section 9-30

A New Tax System (Goods and Service Tax) Act 1999 section 9-40

A New Tax System (Goods and Service Tax) Act 1999 section 38-10

A New Tax System (Goods and Service Tax) Act 1999 section 38-85

A New Tax System (Goods and Service Tax) Act 1999 section 195-1

Reasons for decision

In these reasons for decision, unless otherwise stated:

•         all legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act) unless otherwise specified;

•         all legislative terms marked with an asterisk are defined in section 195-1;

•         all reference materials referred to are available on the Australian Taxation Office (ATO) website www.ato.gov.au; and

•         where the term 'Australia' is used, it is referring to the 'indirect tax zone' as defined under section 195-1.

Reasons for decision

Under section 9-5 you make a taxable supply under if:

(a) you make the supply for *consideration; and

(b) the supply is made in the course of an *enterprise that you *carry on; and

(c) the supply is *connected with the indirect tax zone; and

(d) you are *registered, or *required to be registered for GST.

However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed.

You are registered for GST.

You provide classes that teach CPR and first aid to parents and families with babies and children up to primary school age for consideration in Australia.

Therefore, your supply of the classes satisfies section 9.5.

There are no provisions in the GST Act that make the supply of your classes input taxed.

However, supplies of health services and education courses may be GST-free under Division 38 where certain conditions are met.

Other health services

Subdivision 38-B sets out the supplies of health services and goods that are GST-free.

Under section 38-10(1), a supply of a health service is GST-free when all of the following requirements are satisfied:

(a)  it is a service of a kind specified in the table in this subsection, or of a kind specified in the regulations; and

(b)  the supplier is a *recognised professional in relation to the supply of services of that kind; and

(c)   the supply would generally be accepted, in profession associated with supplying services of that kind, as being necessary for the appropriate treatment of the *recipient of the supply.

Services of a kind specified in the table

The table in subsection 38-10(1) lists the following health services:

• an Aboriginal or Torres Strait Islander health service
• acupuncture
• audiology or audiometry
• chiropody
• chiropractic
• dental
• dietary
• herbal medicine (including traditional Chinese herbal medicine)
• naturopathy
• nursing
• occupational therapy
• optometry
• osteopathy
• paramedical
• pharmacy
• psychology
• physiotherapy
• podiatry
• speech pathology
• speech therapy
• social work.

Goods and Services Tax Industry Issues Health Industry Partnership Issue 2.a Section 38-10 Other health services (Issue 2.a) explains that to satisfy paragraph 38-10(1)(a) the service must be the provision of one of the actual services listed and not just be similar to one of those services.

Nursing is listed at Item 10 as a service of a kind in the table under subsection 38-10(1). First aid and CPR is not listed as a service of a kind in the table under subsection 38-10(1).

You employ registered nurses to teach your classes. However, the mere fact that the class is taught by someone who is recognised as a nurse and is tailored to teach skills for paediatric first aid and CPR, including how to recognise signs or symptoms of sickness, does not make it a nursing service.

Your classes would need to be considered a technique used by someone providing a nursing service and generally accepted in the profession as being necessary for appropriate treatment. If the classes are not a technique used by a recognised professional that provides nursing services, paragraph 38-10(1)(a) will not be satisfied.

Recognised professional

As defined under section 195-1, a person is a 'recognised professional', in relation to a service specified in the table in subsection 38-10(1), if:

(a) the service is supplied in a State or Territory in which the person has a permission or approval, or is registered, under a *State law or a *Territory law prohibiting the supply of services of that kind without such permission, approval or registration; or

(b) the service is supplied in a State or Territory in which there is no State law or Territory law requiring such permission, approval or registration, and the person is a member of a professional association that has uniform national registration requirements relating to the supply of services of that kind; or

(c) in the case of services covered by Item 3 in the table - the service is supplied by an accredited service provider within the meaning of section 4 of the Hearing Services Administration Act 1997.

As discussed above, you have employed registered nurses to teach your classes. Although you are not a recognised professional yourself, this is not relevant for the purposes of paragraph 38-10(1)(b).

Goods and Services Tax Industry Issues Health Industry Partnership Issue 2.a.11 Recognised professionals (Issue 2.a.11) explains that the requirement that the supplier of 'other health services' be a recognised professional is taken to be a requirement that the person who actually performs the 'other health service' must be a recognised professional in relation to supplying services of that kind.[1]

That is, paragraph 38-10(1)(b) focuses on the professional status of the person performing the 'other health service' and requires that the person performing the 'other health service' be a 'recognised professional' in relation to supplying services of the kind specified in the table under subsection 38-10(1).[2]

Therefore, if your employees are a recognised professional in relation to services specified in the table in section 38-10(1), paragraph 38-10(1)(b) will be satisfied.

While the classes are taught by registered nurses that are employed by you, the other requirements under subsection 38-10(1) must be met.

Appropriate treatment

The third requirement under subsection 38-10(1) is that the service must be generally accepted in the profession associated with supplying services of that kind as being necessary for the appropriate treatment of the recipient of the supply. 'Appropriate treatment' is not defined in the GST Act.

Paragraphs 10 and 11 of Issue 2.a. sets out the Commissioner's view on the meaning of 'appropriate treatment':

10. It is considered that 'appropriate treatment' will be established where the recognised professional assesses the recipient's state of health and determines a process to pursue, in an attempt to preserve, restore or improve the physical or psychological wellbeing of that recipient insofar as that recognised professional's particular area of training allows and will include subsequent supplies for the determined process.

11. 'Appropriate treatment' includes the principles of preventative medicine. Such treatment must be generally accepted in the profession associated with supplying services of that kind, as being necessary. 'Appropriate treatment' will not include supplies undertaken for a third party, which does not encompass treatment.

Goods and Services Tax Industry Issues Health Industry PartnershipIssue 2.a.13. What is the GST status of health services provided to more than one person at the same time? (Issue 2.a.13)sets out the Commissioner's view on the GST status of health services when they are provided to more than one person at the same time.

Paragraph 1 of Issue 2.a.13 provides that the provider of the service needs to consider and assess whether the treatment is 'appropriate treatment' for the particular individual receiving it.

Paragraphs 3 to 4 of Issue 2.a.13 provides:

3. Attendance at the actual group session, provided by ... a recognised professional, where it is assessed as being appropriate treatment by a referring or providing practitioner for that person, will be GST-free where the elements of ... section 38-10 respectively are satisfied.

4. Attendance at a seminar providing general information which is not directly targeted at a specific need of the recipient as assessed by ... a recognised professional will not be considered to be necessary for the appropriate treatment of the recipient of the supply and therefore not GST-free. Similarly, programs which are targeted at general health only, such as health and fitness clubs, will not be GST-free.

You provide CPR and first aid classes taught to parents and families of children up to primary school age. The classes are not part of the treatment or care of an illness, disability or condition. Your classes teach a range of emergency first aid skills and techniques for babies and children. You give instructions on how to recognise specific signs and symptoms of sickness, where and when to seek help, and how to provide home treatments if medical or emergency attention is not required.

Although the recognition of a sick child component of the class is tailored for paediatric needs, it is a merely a component of a CPR and first aid course. A typical aspect of a first aid course will include teaching how to recognise when CPR and first aid is required, where and when to seek help, and what treatments you can provide if medical attention is not required. Although you may provide more specific instructions regarding paediatric conditions, this does not alter the fact that you are providing a course of instruction.

While you employ registered nurses to teach the classes, they are providing education to people who attend the classes rather than assessing the needs of the recipient to provide services and treatment that preserve, restore or improve the recipient's health. The classes are directed at teaching people how to deal with and respond to certain situations if they should arise. While appropriate treatment can be preventative, teaching skills on how to identify and respond to signs of sickness and illness in babies and children is not a treatment.

You do not provide antennal or breast-feeding classes. Therefore, your classes are not similar to the examples provided at paragraph 6 to 9 of issue 2.a.13 dealing with antenatal and breasting feeding classes.

Furthermore, antenatal and lactation classes may only be GST-free if the recipient has been assessed and a recognised professional has determined that the class is 'appropriate treatment' to otherwise preserve, restore or improve their health.

Therefore, the supply of the CPR and first aid classes are not GST-free supplies as subsection 38-10(1)(c) is not satisfied because the class is not an appropriate treatment.

Recipient of the supply

Under subdivision 38-B, certain supplies are only GST-free if the individual receiving the service is the recipient of that supply. This is due to the specific wording of some of these provisions.

For the purposes of the subsection 38-10(1), this is because paragraph (c) provides that the supply must be 'necessary for the appropriate treatment of the recipient of the supply'.[3] This means that if the recipient of the supply is not the person receiving the appropriate treatment (such as another business entity) paragraph 38-10(1)(c) cannot be satisfied.

You have arrangements with private hospitals, public hospitals and not-for profit organisations to provide your classes. Under these arrangements, we must consider who is the recipient of the supply.

Goods and Services Tax Ruling GSTR 2006/9 Goods and services tax: supplies (GSTR 2006/9) examine the meaning of supply in the GST Act and discusses how to identify and characterise supplies in the context of the transactions in which they are made.

GSTR 2006/9 provides a number of propositions which focus on analysing the various arrangements in which supplies are made. The propositions are not universal as they may have exceptions or be qualified either by the operation of particular provisions, or by the facts and circumstance of a transaction.

In a simple two-party transaction, it is usually easy to identify the recipient of the supply. However, in more complex arrangements involving more than two entities (known as tripartite arrangements), it is less straightforward to identify the recipient of the supply, the supplier and what is being supplied.

Proposition 11 from paragraphs 119 to 122 GSTR 2006/9 explains that the agreement is the logical starting point when working out the entity making the supply and the recipient of that supply when dealing with tripartite arrangements.

Proposition 13 in GSTR 2006/9 explains that one type of tripartite arrangement is where one entity, entity A, has an agreement with another entity, entity B, for B to provide a supply to entity C. Under this arrangement there is a supply made by B to A (contractual flow) that B provides to C (actual flow). This concept of supply and provide is illustrated in paragraph 118 of GSTR 2006/9. Examples 4 and 5 from paragraphs 157 to 164 provides examples in a health context.

Based on the agreements and arrangements with the hospitals and other organisations, and consistent with the principles discussed in GSTR 2006/9, we consider that the recipients of your services are the hospitals and other organisations as that is whom the supply is made to.

The hospitals and organisations engage and contract with you to provide your services to benefit their patients or relevant individuals. Therefore, the supply of your services under the arrangements with the hospitals and other organisations will be taxable supplies, regardless of whether the other requirements of subsection 38-10(1) are met.[4]

Conclusion

For a supply of health service to be GST-free under subsection 38-10(1), all of the requirements under that subsection need to be met. As discussed above, we do not consider that the supply of your classes satisfies paragraph 38-10(1)(c) as it is not an appropriate treatment. Furthermore, if the classes are not a technique used by a recognised professional that provides nursing services, paragraph 38-10(1)(a) will not be satisfied.

Under the arrangements with the hospitals and other organisations, and notwithstanding that we do not consider the supplies of the classes to be an appropriate treatment, the recipient of your supply is another business entity and not an individual requiring the treatment.

Therefore, your supplies of CPR and first aid classes are not GST-free under subsection 38-10(1).

Education courses

Subdivision 38-C deals with education, including the supply of certain education courses that are GST-free.

Under section 38-85, a supply is GST-free if it is a supply of:

(a)  an *education course; or

(b)  administrative services directly related to the supply of such a course, but only if they are supplied by the supplier of the course.

'Education course' is defined under section 195-1 and includes a 'first aid or life saving course'.[5]

You provide CPR and first aid classes to parents and families of children up to primary school age.

We must determine whether your classes are a 'first aid or life saving course' under paragraph (i) of the definition of education course under section 195-1.

First aid or life saving course

'First aid or life saving course' is defined under section 195-1 to mean a course of study or instruction that:

(a) principally involves training individuals in one or more of the following:

(i) first aid, resuscitation or other similar life saving skills including personal aquatic survival skills but not including swimming lessons;

(ii) surf life saving;

(iii) aero-medical rescue; and

(b) is provided by an entity:

(i) that is registered (or otherwise approved) by a State or Territory authority that has responsibility for registering (or otherwise approving) entities that provide such courses; or

(ii) that is approved to provide such courses by a State or Territory body that has responsibility for approving the provision of such courses; or

...

You provide CPR and first aid classes that teach, among other things, how to provide emergency first aid for babies and children, including CPR. Your classes principally involve training individuals to provide first aid and resuscitation... Your classes meet the requirements under subparagraph (a)(i) of the definition of 'first aid or life saving course' under section 195-1.

However, as you are not a registered training organisation or approved by a State or Territory body that has responsibility for approving the provision of these courses, the requirements under subparagraph (b) (i) or (ii) are not met.[6] These classes do not satisfy the requirements to be a 'first aid or life saving [course]' under the GST Act.

Therefore, your supply of the CPR and first aid classes is not GST-free under section 38-85 as an education course.

[1] See paragraph 2 of Issue 2.a.11.

[2] See paragraph 3 of Issue 2.a.11.

[3] (emphasis added).

[4] Notwithstanding the fact that the classes are not an appropriate treatment, if paragraphs 38-10(1)(a) and (b) were satisfied, the supply to the hospitals and other organisations would not be GST-free because the recipient of the supply is not the person who would require the treatment.

[5] See paragraph (i) of the definition of education course under section 195-1.

[6] For completeness, subparagraphs (b)(ii) to(vi) are not relevant as you do not provide a life saving class.